This article first appeared in The Edge Malaysia Weekly on September 11, 2023 - September 17, 2023

A day after KNM Group Bhd’s share price surged to a multi-year peak, its trading volume swelled to a record high of 804 million shares.

The company had completed a private placement of shares over the past several months.

As its share price headed north, there was widespread speculation about a possible takeover bid, as there was keen interest in its wholly-owned German unit Borsig GmbH.

This was the scenario that KNM faced two years ago. But this could also describe the latest developments in the company.

Last Wednesday, KNM’s trading volume swelled to 501 million shares — the highest level in two years since Sept 8, 2021.

Its share price climbed to an intra-day high of 13.5 sen, rebounding from around five sen.

Similar to the events of two years ago, a new substantial shareholder — German billionaire Andreas Heeschen — emerged in the company on Aug 29 with a 7.91% stake, or 320 million shares, of which 200 million were transferred to him under the terms of a governing agreement. It is not known from whom he got the shares.

Likewise, in 2021, KNM non-executive chairman Tunku Datuk Yaacob Khyra’s flagship MAA Group bought an 8% stake in KNM. He currently controls 9.44%.

Heeschen has been hostile to the incumbents. Together with a few shareholders collectively holding more than 10%, he wants to convene an extraordinary general meeting to remove the existing nine board members, including Yaacob.

Among the replacements that have drawn the investing public’s attention is Johor princess Tunku Kamariah Aminah Maimunah lskandariah Sultan Iskandar.

Still, so far, there has been no material development in terms of turning KNM around, apart from the possible proxy fight between the incumbents and Heeschen, who has not revealed his ultimate goal in buying into financially distressed KNM. It is only hearsay that he is doing so to get hold of its crown jewel — Borsig.

Will the ending this time around be different from two years ago, when its share price lost momentum soon after it reached its peak and drifted to an all-time low of four sen?

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